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Wheat Flour Price Shocks and Household Food Security in Afghanistan

by Anna D'Souza

Economic Research Report No. (ERR-121) 35 pp, July 2011

err121 cover image To investigate the impact of rising staple food prices on household food security, we use a unique nationally representative household survey from Afghanistan, one of the world’s poorest, most food-insecure countries. The econometric framework allows us to control for household, district, and province factors to isolate the effects of the 2008 sudden rise in wheat flour prices on several measures of household well-being related to food security. The results show large declines in food consumption and dietary diversity, but smaller declines in calories consumed. The evidence suggests that households choose to trade off quality for quantity, as they moved toward staple foods and away from micronutrient-rich foods, such as meat and vegetables. Additionally, for urban areas, the evidence suggests that wheat is a Giffen good; that is, as the price of wheat flour increases, demand for wheat products also increases. These findings may provide useful information for domestic and international policymakers and development agencies as they continue to confront the challenges of improving food security in this conflict-affected country.